Plans

NEW business premium of life insurance companies declined by 25.09 per cent to Rs 13,857.89 crore in August 2011, compared with Rs 18,500.49 crore in the same month in the previous year.

The decline in premium collection on a year-on-year basis can primarily be attributed to the fall in individual single premium, from Rs 6,221.10 crore in August 2010 to Rs 1,208.82 crore in August 2011, a plunge of 80.57 per cent.

Individual regular premium collection slumped 33.53 per cent from Rs 4,573.41 crore in August 2010 to Rs 3,039.94 crore in August 2011, according to data released by the Insurance Regulatory and Development Authority (Irda).

“The overall industry is in a capacity build-up phase since September last year, hence we are witnessing sharp year-on-year drop in volumes that will contin
ue till September end of the present year. We should see year-on-year growth from October onwards of present year. The product mix landscape has also been undergoing a change with gradual shift from Ulips to traditional and single premium policies,“ said Suresh Agarwal, executive vice-president and head of alternate channel and strategic initiatives of Kotak Mahindra Old Mutual Life Insurance.

Insurers also witnessed a drop in their group regular premium policies.
While the collection from this segment was Rs 5,555.35 crore in August 2010, insurers managed only Rs 1,785.01 crore in August 2011, a 67.87 per cent drop.

However, collection from group single premium policies increased almost 2.5 times to Rs 7,824.12 crore in August 2011 from Rs 2,150.63 crore in August 2010.

Out of the total 24 life insurers, only three insurers managed to show positive growth in their total new premium collections.
IndiaFirst Life Insurance Company has shown the highest growth of 63.58 per cent, as its collection rose from Rs 50.77 crore in August 2010 to Rs 83.04 crore in August 2011.